A controversial and wide-ranging sex discrimination case against US retailer Walmart is currently wending its way through the country’s highest court.

A 10-year-old case, Walmart v Duke, began with legal action by six women, but could potentially launch America’s largest ever class action involving up millions of American women.

With billions of dollars in back pay and punitive damages at stake for Walmart - North America’s largest private employer and a multinational operating in United Kingdom, Mexico, India and Canada, among others - it’s hardly surprising the case is being closely followed by both American and international companies.

The case also marks an attempt by the Supreme Court to look at the standards for certifying a class action and the possibility of putting tighter restrictions on class-action suits.

Additionally, it will put to the test both the US Supreme Court’s pro-business stance as well as the gender make-up of its judges.

The background

The latest confrontation between the parties commenced in late last month in the United States’ most superior court, the Supreme Court. The judgment, expected in June, will set the rules for class action applications for the rest of the country.

The court will determine whether up to 2 million women employed by Walmart can file a sex discrimination lawsuit as one unified group.

If allowed, it would cover any woman who has worked for one of more than 3400 Walmart stores in the US since December 1998.

The saga first began in June 2001 when six female current and former female hourly workers and managers filed an initial suit accusing Walmart of systematically denying women workers equal pay and opportunities for promotion through policies and practices across all their stores.

The company has denied this, saying “the company promotes women employees and pays them well”. Walmart’s lawyer, Theodore Boutrous argues Walmart’s written company policy forbids discrimination, not encourages it and operates under a system of promotion and pay determined by decentralised managers.

An initial decision by District Court in June 2004 granted the case class action status and was affirmed in December 2007 by the United States Court of Appeals for the Ninth Circuit.

Walmart has taken the case to the Supreme Court, arguing the claims are too varied to proceed as a single lawsuit.

Common case to answer?

It’s important to remember that the question before the Supreme Court is not whether Wal-Mart discriminated against the women, but whether the alleged victims have enough in common that their claims can be fairly decided in a single action.

The US Supreme Court is the highest court and is made up of nine judges who are nominated by the President and confirmed by the Senate. Current opinion suggests that the court might be divided about this case along gender lines, with the three female justices, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan emerging as possibly more sympathetic to class action, while Justices Antonin Scalia, Anthony Kennedy and Samuel Alito voiced scepticism on the first day of hearing.

Controversially, it has also been suggested by practicing class action lawyer and academic John ‘Sean’ Coffey that the court may not confine its opinion exclusively to Walmart, but could add ‘pro-business’ language to the law.

The implication of this is that lower courts may use this to ‘chip away’ at the class action device in relation to sexual discrimination in the future.

Columbia University’s political science Professor Dorian Warren also recognises the pro-business stance of the Supreme Court; although the present court make-up of three women is likely to produce some divergent and interesting opinions in this case.

Principles of class-actions

For it’s part, Walmart is arguing the order allowing the class action is harmful to to the “rights of everyone involved” as it “distorts basic principles of class-action and anti-discrimination law”.

The order, Boutrous argues, eviscerates fundamental procedural protections for class-action defendants and allows the rights of millions of absent class members to be extinguished.

The Court has previously recognised the ‘wide gap’ between individualised allegations of discrimination and a company-wide practice that may be challenged in a class action.

To bridge this gap, class plaintiffs must submit “significant proof that an employer operated under a general policy of discrimination”. The plaintiffs must answer the threshold issue of whether there is a sufficient nexus between the subjective decision making and output.

In order to answer this question the plaintiffs are relying on three categories of evidence - statistics, sociology and anecdotes. In response, the petitioner argues that the plaintiff has not bridged the wide gap between their own individual assertions and the class-wide claims and using statistical, sociology and anecdotes type of evidence only highlights the lack of commonality required for a class action.

Punitive damages

A further important issue is the plaintiffs’ back pay and punitive damages claims. Boutrous argues the ‘plaintiffs are seeking monetary relief in the form of back pay, as opposed to compensatory damages, does not alter the conclusion that the request for monetary relief is predominate’.

While back-pay is a form of monetary relief that has on occasions been characterised as equitable, according to Boutrous it is nothing more than monetary compensation for past harm.

The importance of this case cannot be underestimated and the legal ramifications for class action applications will finally be clarified by the Court.

What decision the Supreme Court will make will determine whether or not this case goes forward as a class action or as an individual plaintiff action. Everyone continues to watch and wait.